Sunday, June 19, 2011

Corruption, Inflation & Monsoon worries

Corruption

I am not very supportive of Lokpal bill. Its need questions the viability of our constitution. Do we not have systems within current set-up that check this? All the credit to unearth the corruption cases- Bofors, Hawala, Fake stamp paper, 2G, Common wealth etc. should go to only to our democratic set-up where judiciary and investigating agencies are independent enough to act.

I do not discredit what Anna has done for India but threatening to re-start fast is an overkill and too immature a reaction. Why does he not exercise rationality and diplomacy in fighting for the draft of Lokpal bill with government? Fasting and mass movement methods help create awareness but decisions should be taken post a thorough and comprehensive analysis of all factors in play.

Is corruption such a worry when we have millions following our rich Babas who preach how to be better humans? Is there no corruption in US or in China or in any other developing country? Its better if we spend our energies on narrowing gap between rich and poor. In my view poor in our country should have access to good healthcare facilities, education and programs to make agriculture in this country a profitable/viable profession.

While we claim to have build on a very efficient and cost-effective distribution channel we all know where is all the money made- the intermediaries who trade at no risk of their own. This situation at times prompt me to support FDI in (multi-brand) retail. Farmers through Gram Panchayats can always fix the price at which they sell to big retail chains and hence not threat of repeat of what Wallmart has done to US. We are not as capitalist as US.

Inflation

In current state of affairs extra effort on part of RBI to target inflation is wrong. We all understand why inflation impacts growth but I feel extra efforts on inflation targeting is making GDP growth short-lived- just a few quarters spread over a span of 2-3 years. Lets risk a little with high inflation. If we have to growth at 9-10% year-on-year containing inflation below 8-9% may be a challenge in the current set-up (atleast for a period of 5 years). Government should ensure through its social schemes that poor is least impacted, rest market forces will make higher inflation a 'zero-sum game'- no single agent in economy makes disproportionate gains.

Monsoon

We are lucky that monsoon this year is expected to be normal and on time.